Answered

Westonci.ca is the premier destination for reliable answers to your questions, provided by a community of experts. Get quick and reliable solutions to your questions from a community of seasoned experts on our user-friendly platform. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

The same question stem will be used in the next 5 questions. Question stem: Assume that banks hold 7 percent excess reserves, the currency to deposit ratio is 15 percent, and the required reserve ratio is 10 percent. Suppose that the Federal Reserve purchases 250 million dollars worth of bonds from the public. First question for this stem: What is the value of the deposit multiplier

Sagot :

Parrain

Answer: 10

Explanation:

The Deposit multiplier is a number that enables us calculate the maximum total amount of money that can be generated from deposits in a bank after the bank has left a portion of its deposits as required reserves.

= 1 / Required reserve ratio

= 1 / 10%

= 10

Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. We're dedicated to helping you find the answers you need at Westonci.ca. Don't hesitate to return for more.